regulatory authority under the Ordinance and the franchise agreement by
granting the PSC exclusive jurisdiction to regulate certain activities of
telecommunications providers (Claim 10). According to plaintiffs, those
aspects include, inter alia, the capitalization of telephone companies
and their facilities, the manner in which their lines and property are
leased, operated, or managed, the safety and security of lines, and the
authority to inspect the property and records of the telephone carrier.
See N Y Pub. Serv. Law § 94(2).
Plaintiffs argue that because TCG has obtained the necessary
certificate of public convenience and necessity from the PSC, it follows
that the PSC has reviewed and analyzed TCG's legal, financial and
technical ability to construct and operate telephone and
telecommunications facilities, and has found TCG to be qualified.
Accordingly, plaintiffs claim that portions of the Ordinance and the
August Proposal overlap with the PSC's jurisdiction and should be
Most of those provisions which TCG asserts are duplicative of, or are
in conflict with, the PSC's jurisdiction either have been mooted by the
August Proposal or dismissed by this Court. Accordingly, the Court need
not address those particular sections of the Ordinance or the August
The remaining provisions, which relate to topics such as renewal terms
of the franchise, rights upon the termination of the franchise, change of
control and assignment, do not, in this Court's opinion, implicate §
94 of the N.Y. Public Service Law in the manner TCG asserts.
Accordingly, Claim 10 is dismissed.
III. Due Process Under the Fourteenth Amendment
TCG claims that the City has violated its due process rights under the
Fourteenth Amendment by taking, without compensation, TCG's "right" under
the New York Transportation Corporation Law to use the public
rights-of-way (Claim 13). As discussed above, the City has not "taken"
property from TCG that was granted under § 27 of the N.Y.
Transportation Corporations Law, but, instead, has exercised its right to
approve or deny permission as granted by that statute. The City was simply
exercising its regulatory powers in requiring TCG to agree to a
franchise, and, accordingly, is not in violation of the 14th Amendment.
See New York Telephone Company v. Commissioner of New York State
Department of Transportation, 62 Misc.2d 6, 307 N.Y.S.2d 945, 949
(N.Y.Sup. 1970) (finding no deprivation of property without just
compensation under 14th Amendment where telephone company subject to
§ 27 of N.Y. Trans. Corp. was denied state franchise to install
buried telephone cable); see also New York Telephone Company v. Town of
North Hempstead, 41 N.Y.2d 691, 699-700, 363 N.E.2d 694, 395 N.Y.S.2d 143
(1977) (noting that "[t]elephone [c]ompany's right to erect poles under
section 27 of the Transportation Corporations Law has been held to be a
license or privilege" and not a property interest).
Moreover, even if the City's requirement of a franchise were to have
taken a valid property interest, the City's requirements would, for 14th
Amendment purposes, constitute a permissible economic regulation. See
Eastern Enterprises v. Apfel, 524 U.S. 498, 523, 118 S.Ct. 2131, 141
L.Ed.2d 451 (1998) (noting that "party challenging government action as
an unconstitutional taking bears a substantial burden," and that
"[g]overnment regulation often curtails some potential for the use or
economic exploitation of private property, . . . and not every
destruction or injury to property by governmental action has been held to
be a taking in the constitutional sense.") (internal quotations and
citations omitted). Accordingly, plaintiffs' constitutional claim under
the 14th Amendment is dismissed.
For the foregoing reasons, this Court finds in favor of plaintiffs, in
part, and in
favor of defendant, in part. The parties are directed to settle a
judgment in 14 days on 5 days notice. listed grant as having been made
eight years earlier.